helplessness about future course
Wall Street closes weaker after Fed decision
05/03/2023 11:06 p.m
The Fed will raise interest rates by another 0.25 percent. No surprise for Wall Street, but investors aren’t particularly optimistic about the Fed’s next move either. The US stock exchanges are falling significantly. A ray of hope is the pharmaceutical company Eli Lilly, which is celebrating a breakthrough in Alzheimer’s research.
Wall Street ended trading with losses following the US Federal Reserve’s interest rate decision. The Federal Reserve Bank raised the key monetary rate by a quarter of a percentage point to the new range of 5.0 to 5.25 percent on Wednesday. At the same time, she signaled a possible break. The US stock exchanges were initially able to hold their gains, but then gave way during the press conference by Fed Chair Jerome Powell.
Powell said interest rates might be at a high enough level, or at least not far off. At the same time, it dampened market expectations of interest rate cuts in the near future. The leading US index Dow Jones lost 0.8 percent to 33,414 points. The tech-heavy one Nasdaq fell 0.5 percent to 12,025 points and the broad S&P 500 lost 0.7 percent to 4090 jobs.
Powell left some investors perplexed about the Fed’s next move. Investors had hoped for clear signals that the current rate hike would be the last for the Fed for the time being. “It doesn’t sound like they got there,” said Toledo-based investment adviser Alan Lancz. “It’s ambiguous.”
Concerns about the further development of the global economy in view of the rising interest rates weighed on the oil price again. According to data from the Department of Energy, US gasoline stocks also rose surprisingly. The North Sea crude oil variety Brent and the US variety STI fell 4.5 percent to $71.93 and 4.9 percent to $68.18 per barrel (159 liters). On Tuesday, they were down five percent, posting their biggest one-day decline since early January. Equities in the energy sector remained under pressure given price developments. chevrons and Exxon Mobile fell by two percent.
Concerns about the economy also slowed the US currency. These were temporarily mitigated by a surprisingly strong increase in jobs. According to data from the private provider ADP, 296,000 jobs were created in the US private sector in April, twice as many as expected. The dollar index, which measures the value of the greenback against other major currencies, was down 0.6 percent to 101.37 points. The Euro in turn, gained to $1.1052.
Estee Lauder slips
In the chip sector, a disappointing forecast of spoiled AMD the mood. The titles lost more than nine percent. The chip manufacturer expects sales of around 5.3 billion dollars for the current quarter, which was slightly below analysts’ expectations. Reason is the weakening PC business. A forecast cut also sent shares of Estee Lauder downhill. The papers of the US cosmetics company fell by more than 17 percent
A breakthrough in Alzheimer’s research, on the other hand, gave the pharmaceutical company a boost Eli Lilly, whose shares soared more than 6 percent. Titles from Kraft Heinz. The US food company has raised its annual forecast after a jump in profit and sales in the first quarter.
The descent from Icahn Enterprises continued rapidly a day after short seller Hindenburg Research attacked. The papers of the company conglomerate of the financial investor Carl Icahn fell by a further 19 percent to $ 32.57. On Tuesday, shares were down 20 percent after Hindenburg revealed a short position in Icahn Enterprises and denounced alleged wrongdoing at the group.